CENTRAL PROVIDENT FUND SAVINGS (Exemption from estate duty)

Dr Ow Chin Hock asked the Minister for Finance, in view of the facility to use Central Provident Fund savings to purchase property which may enjoy exemption from estate duty up to the value of $600,000, if he will grant similar exemption to CPF balances of up to $600,000 upon the death of a contributor who does not own property.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, the answer to the Member's question is, simply, no.

The exemption from estate duty for residential property is to encourage home ownership and to ensure that families do not lose their homes on the death of the bread-winner on account of estate duties. For this reason the exemption limit was revised to $600,000 this year to take into account the higher prices of properties.

The Government's intention is best carried out by exemption applied direct to property owned, i.e. to property actually, and not notionally, owned. I do not therefore propose to grant exemption from duty on CPF savings, or indeed other savings, whether in the Post Office Savings Bank, in banks or other savings institutions, of up to $600,000 on an estate of a deceased who does not own any residential property. The exemption ceiling in respect of such an estate will remain for the present at $100,000.